Share the Wealth: Giving Circles

Little Commitment, Big Difference

For five years Ericka Carter and three of her closest friends, all of them public-school teachers in Los Angeles, would get together in her living room every month to discuss books and spirituality. "Somehow we always ended up talking about how upset we were with all the problems in the world, like the war in Iraq and Hurricane Katrina," recalls Ericka, 43, the mother of a 6-year-old. "Finally we said to one another, 'Enough complaining! Let's start doing something to help, right here in our own neighborhood.'"

One of the women had recently read about giving circles, groups of people who combine donations for a specific charity. And in the summer of 2005 the San Fernando Valley Giving Circle was born. "We sent an eVite to friends and colleagues, and at our first meeting 12 people showed up and raised $230," says Ericka. "We decided to give the money to a local family that had just lost their home in a fire and were left with nothing."

The group, now 35 strong, meets every other month, and each member contributes about $10. "That's not a lot, but it can make a huge difference for needy women and children, whom we've chosen to focus on," says Ericka. "Last year, when I delivered food coupons to a struggling young mother, she told me, 'Please ask other people to do this too, because people like us usually get help only at Christmas.' I can't begin to describe how that made me feel. Forming this group has truly been a life-affirming experience."

Many Ways to Give

That sense of satisfaction is the reason that giving circles have become so popular. Some 12,000 people, most of them women, have joined one, and the groups have raised nearly $100 million across the country. Similar to the investment clubs of the 1990s, which take small amounts of money from individuals and lump the funds together to buy a bigger block of stock, giving circles enable members to get more bang for the buck — this time while helping others.

Some groups are cozy and laid-back; the members of Dining for Women in Greenville, South Carolina, hold potluck suppers in one another's homes and donate what they would have spent at a restaurant to help impoverished women and children in Africa, Asia, and Central America. Other giving circles, such as the Washington Women's Foundation in Seattle, involve hundreds of people and award millions of dollars in annual grants to a variety of social-service organizations.

"One of the most attractive aspects of the giving circle is its flexibility," says Daria Teutonico, director of the New Ventures in Philanthropy initiative at the Forum of Regional Associations of Grantmakers, a nonprofit organization based in Washington, D.C., that encourages and monitors charitable activities across the country. "There's no one-size-fits-all model." Want to start giving back with your own circle of friends? Follow these recommendations from the experts.

Starting a Circle

Put your passion into action. Invite a small group of friends, coworkers, and neighbors who share your desire to better the world and hold a brainstorming session. You'll have several key decisions to make.

What's your giving circle's mission? Will you focus locally — where you can see up close the impact of your donations — on individuals or a neighborhood institution, like a school or hospital? Or do you want to pay it forward by giving your money to a larger, better-established nonprofit organization that helps people throughout the country or internationally?

What will you call your giving circle? Where will you meet and how often? What will be the responsibilities of each of the members?

How much will members be required to contribute and will everyone have to donate the same amount?

"It's important to answer these questions at the very beginning and set some parameters," says Teutonico. "Otherwise things can easily become too overwhelming later on."

Get size wise. At your second meeting, discuss how large your giving circle will be. "With a small group you really keep that personal connection with one another — and with the people you're helping," explains Teutonico. "Larger groups have the benefit of being able to raise a lot more money, but they also require more structure, and you may need to hire an administrator or get outside help. Choosing beneficiaries is also more complicated and usually involves appointing committees, soliciting grant proposals, and wading through a long list of applicants." Some people who have had experience setting up giving circles say that 35 to 40 members is ideal — large enough for your charity dollars to pack a punch but small enough that members stay actively engaged in the cause — and with one another.

Manage your money. In some groups, members simply write personal checks and mail them to their chosen charity; in others money is deposited into a joint bank account and a single check is written to the beneficiary. Your giving circle could also partner with another group, such as an association of regional grant makers, that would act as an adviser and financial administrator. Eventually you may wish to set up your giving circle as a nonprofit organization, which would make all donations and administrative costs tax deductible.

Enjoy the rewards. Once your giving circle starts making donations, you'll be able to see your money in action. The Giving Circles of Hope, in Reston, Virginia, for example, has given more than $200,000 to local organizations that help low-income residents, the homeless, and the elderly. Giving Circles also sponsors an annual grantees party, where members can meet and mingle with the organizations and people they've helped during the year.

Involving the Kids

Another benefit of joining a circle is that moms can recruit their kids to the cause and teach them the value of giving. When Buffy Beaudoin-Schwartz helped found the Women's Giving Circle of Howard County, Maryland, in 2001, to raise money for local programs that benefit women and girls, she asked her daughter, Jordan, then 9, to pitch in a few quarters as well. Jordan, who has now contributed about $100, also got people to donate art supplies through the Women's Giving Circle, which were then given to a county children's center. "I'm so proud of her," says Beaudoin-Schwartz, who also works with the Association of Baltimore Area Grantmakers.

Ericka Carter has seen firsthand how the benefits can multiply and take on a life of their own. Two friends from her giving circle, who recently moved out of Los Angeles, are launching their own groups. "I've witnessed remarkable changes in all of our members," she says. "When you stop focusing on yourself and start looking outward, it's amazing what people can accomplish."

Giving Circles Resources

For general information on starting you own giving circle, visit the Forum of Regional Associations of Grantmakers and the Giving Circles Network: